Employers Interested in ACOs to Decrease Health Care Costs

September 26, 2011 (PLANSPONSOR.com) – According to new report, employers nationwide are starting to explore the “Accountable Care Organization” (ACO) model as a viable option to continue offering employer-sponsored benefits while reducing cost and improving quality of care. 

The survey by Aon Hewitt and Polakoff Boland of 674 U.S. employers reveals that 28% are interested or very interested in exploring ACOs, while 37% are somewhat interested, 24% are unsure, and 11% are not at all interested. Quality of care delivered is the top ranked factor by 82% of employers in evaluating the use of ACOs. This was followed by the ability to manage the total cost of care (81%), patient outcomes (66%), and plan/provider pricing transparency (47%).

“ACOs are considered next-generation health care delivery models, consisting of teams of doctors, hospitals, and other health care providers and suppliers working together to coordinate and improve care for particular groups of patients,” said Michael Cryer, MD and National Medical Director with Aon Hewitt. “ACOs reduce cost by providing plan participants the right care at the right time, in a press release. By improving access to primary care, plan participants can avoid emergency room visits, which results in a financial reward for the ACO and shared savings with the sponsoring organization or organizations.”

In addition, the survey found that 87% of employers believe having a primary care physician in the ACO would be a critical or important positive influence on employee acceptance of the model. Nearly 80% said awareness or reputation of the sponsoring organization is critical or important in influencing employees in a positive manner, and 71% of organizations said having different ACO networks or models to choose from would be a critical or important positive influence on workers. Conversely, 74% of employers indicated that limiting patients to only ACO network providers for care and services would be a significant negative influence on employees, and 66% said the same related to the limited track record of ACOs.  

“It’s clear that ACO proponents need to educate the public about the trade-offs between networks,” said Phil Polakoff, MD, MPH, MEnvSc, and Managing Partner, Polakoff Boland. “ACO models help organizations reduce health care cost, waste, and inefficiencies, as well as support the movement from volume to value-based approaches. This volume to value-based shift can be seen in various employer practices today, such as pay for performance, accountable quality contracts, incentive compensation and bundled payments, which can serve as strong examples of similar successful models to employers and employees alike.”

When asked to what extent each group should share in the ACO’s cost management risk, employers cited medical groups the most (23%), followed by hospitals (22%), health plans (21%), employers (18%), and employees (15%).